THE Malaysian National Cycling Federation (MNCF) have 14 days from yesterday to respond to a show cause letter as to why they shouldn’t be suspended under the Sports Development Act 1997.
Subsequently, the MNCF is facing a suspension of up to a year following findings of a Sports Ministry audit into their accounts and investigations that have revealed the magnitude of irregularities in their expenditure of public funding.
Sports Minister Khairy Jamaluddin, who described this as the beginning of a suspension process, said he had ordered Sports Commissioner Ahmad Shapawi Ismail to issue the show cause letter immediately.
“My only advice to the MNCF would be to respond accordingly and answer the show cause letter within these 14 days,” said Khairy.
The Minister was speaking after his meeting with the Sports Advisory Panel (SAP) headed by chairman Tun Ahmad Sarji Abdul Hamid, which had been tasked with investigations and recommending further action to be taken by the Ministry.
The case involves millions of ringgit in funds channeled to the MNCF from the Ministry for the federation to run their road programme and also includes sums for the organisation of Le Tour de Langkawi (LTdL) between 2011 and last year.
“Overall, upon deliberation of the cases mentioned it was found that the MNCF had made some decisions that were deemed unconstitutional,” said Khairy.
“The MNCF were found to be in breach of good corporate governance and breached of fiduciary duty.
“There were various decisions made by MNCF that have resulted in them not being able to account for a certain amount of funds provided by the Sports Ministry.
“There were also various weaknesses in their financial management and several cases of conflicts of interest involving MNCF officials.”
Having said that, Khairy also did not discount the responsibility of the Ministry which was also found to have given the MNCF too much trust and freedom in handing them funds during that period that allowed these offences to take place without proper monitoring.
Khairy said the details of funds involved could not be revealed as the Ministry is yet to decide on further charges against the officials involved.
“I cannot reveal the sums involved yet, as there are aspects of this report that point to criminal investigation. Until I decide to forward this matter to the relevant authorities, I would rather not mention the sums,” said Khairy.
The MNCF, said Khairy, had been given sufficient right to be heard over five meetings and various interviews with the SAP and auditors since investigations began on April 17, following the audit report.
The SAP had deliberated on the audit report, written feedback from the Sports Commissioner, the auditors, with supporting documents and feedback from the MNCF and recorded statements from all parties involved.
“I am convinced that the SAP have made this recommendation based on a fair and thorough deliberation and very detailed investigations,” said Khairy.
“Thus the panel have made this conclusion due to the existence of so many offences which are against the MNCF’s constitution, financial mismanagement, conflicts of interest.
“This shows a breach of trust, irresponsible behaviour which is very serious that has been in practice for too long by the MNCF, I have decided to instruct the Sports Commissioner to suspend the registration of the MNCF.”
Under section 20 of the Act, the MNCF have 14 days to show why they should not be suspended, to give them a chance to answer. If they fail to provide a valid reason, then a suspension will take effect.
The Ministry has also immediately suspended all funding for cycling programmes under the MNCF, but Khairy said this could continue once a suspension is in place and an ad hoc committee is charged with the temporary administration of the sport.
“This is to minimise the effect of this suspension on our athletes and the sport,” said Khairy.
“Within the suspension period, I will also have the authority to call for any changes required, including for the MNCF to hold an extraordinary general meeting (EGM) to elect new office bearers.